The stock market investors could focus on companies with strong balance sheets, stable growth, attractive dividend yields and low volatility amid the ongoing crisis due to coronavirus, a global financial services company said. "In the US, tech is still likely to remain the long-term winner. In Europe, it's more likely to be a combination of structurally strong and/or stable sectors: Healthcare, Consumer staples and Tech," strategists at Goldman Sachs also said in a note. The strategists have termed the 11 largest stocks, that may currently offer good bet to investors in Europe with strong balance sheets as 'GRANOLAS': Glaxosmithkline, Roche, ASML, Nestle, Novartis, Novo Nordisk, L'Oreal, LVMH, Astrazeneca, SAP, Sanofi.
The stock valuation expansion is not expected to be a push for the bourses in the coming days since the interest rates are at or near zero, Goldman Sachs said. "The leadership of the market in recent weeks supports the view that it is the policy support from governments and central banks - which has helped to reduce tail risks - that has driven the recent rally, rather than a strong increase in growth expectations," the note added.
However, it's still not clear if the markets have entered a bullish cycle or would fall again, it further said. "In a bear market recovery, history shows that the laggards in the bear market tend to be the stocks that rally the most in the eventual economic recovery, especially in the early stages," Goldman Sachs noted.
Meanwhile, S&P 500 ended up more than 13 per cent higher for the month on Wednesday amid reports of a potential coronavirus treatment from Gilead Sciences. It is the index's biggest one-month gain since 1974. The Dow is up 12.4 per cent for April.